The U.S. Department of Housing and Urban Development has issued updated guidance for public housing agencies pursuing the demolition or disposition of public housing property under Section 18 of the U.S. Housing Act.
Notice PIH 2026-23, issued Aug. 28, 2026, amends HUD’s previous Section 18 guidance in Notice PIH 2024-40 and clarifies several requirements affecting public housing repositioning.
Key changes include:
- Expanding the definition of a “very small PHA” to agencies that own and operate 75 or fewer public housing units under their Annual Contributions Contract, while removing barriers to the consolidation of very small PHAs with larger PHAs.
- Increasing the maximum number of units that may qualify as a scattered-site project. The updated guidance defines scattered-site units as six or fewer total units in contiguous or noncontiguous buildings on one side of a block.
- Clarifying how Section 18 disposition guidance applies to mixed-finance developments, including circumstances involving long-term financial and physical viability.
- Clarifying when functional obsolescence may support demolition or disposition under Section 18.
- Clarifying that buildings designated as severely distressed through an approved Choice Neighborhoods Planning Grant may qualify under the physical obsolescence justification.
- Adding guidance on when HUD’s Special Applications Center may discontinue its review of an application that does not meet Section 18 submission requirements.
The notice also addresses application documentation, resident and local government consultation, relocation, environmental review, civil rights requirements, and eligibility for tenant protection vouchers.
PHAs considering demolition, disposition or other repositioning strategies should review the updated notice to understand how the changes may affect current and future projects.
Read Notice PIH 2026-23 for the full Section 18 guidance and requirements.
For more information on public housing repositioning, redevelopment strategies, and trends affecting housing authorities, explore the Public and Affordable Housing Research Corporation's (PAHRC) blog post and research on the topic. PAHRC provides research, data, and resources to help housing organizations better understand the changing affordable housing landscape and make informed decisions about their communities.
